High street retailers have seen sales plummet in the past fortnight after negative headlines about the current banking and credit crisis hammered consumer confidence.
This week the British Retail Consortium said that clothing sales had worsened in September compared with August's figures. Retailers told Drapers that business had got even worse in October and that they urgently needed the banking crisis to settle to help boost consumer confidence in the run up to the crucial Christmas trading period.
One director of a multiple retailer said: "The first two weeks of September were better because of the autumnal weather and pent up demand but the underlying negative performance in the mainstream sector has got much worse in the last two weeks.
"People are genuinely frightened by the headlines and want to keep their money in their pockets. There will be a peak at Christmas as usual, but it will be a much a smaller peak which will occur a lot later.
"Young fashion has been pretty immune to the banking crisis though – those shoppers just don’t really feel affected by it."
Another retail chief executive said: "Trading has been much tougher over the past two weeks but it hasn’t fallen completely off a cliff. We do need it to pick up for Christmas though. After September 11 we all thought the world would never recover but confidence did return. When this [bank crisis] dies down it will improve."
One premium brand boss said: "Once we started getting the daily doom and gloom from mid-September there was a definite further consumer slowdown. But when things settle down with the banks then Christmas will come.
"Generally people are still employed and have money they can spend if they want to. The real trading uncertainty is what happens when the recession kicks in and what happens then with unemployment."
One young fashion director said: "Touch wood we’ve traded pretty well over the last couple of weeks but we’ve got our ducks in a row and to anyone who hasn’t got their business in good shape – well it’s going to be survival of the fittest this Christmas."